Revisiting the role of financial inclusion on economic growth of selected Southern African economies: Implications for unemployment

This study investigates the impact of financial inclusion on economic growth and unemployment in six Southern African countries: South Africa, Angola, Zambia, Namibia, Mozambique, and Zimbabwe, from 2004 to 2023. Employing Panel ARDL, FMOLS, and quantile regression, the paper examines both long-run dynamics and distributional heterogeneity. The interaction between financial inclusion and GDP (FINC × GDP) captures its conditional effects across different development stages. FMOLS and fixed-effects results indicate a strong positive association between financial inclusion and growth (β = 0.26, p < 0.001), with regulatory quality emerging as a key determinant. The Panel ARDL long-run coefficient is negative, indicating transitional and nonlinear adjustments. Regarding unemployment, financial inclusion supports long-run growth (β = 0.333, p < 0.001), though the negative FINC × GDP interaction suggests that its effect may diminish as GDP rises. Quantile regression confirms that financial inclusion significantly affects unemployment at higher quantiles (τ = 0.7), while inflation reduces unemployment. Unit root and cointegration tests validate the long-run relationships and stationarity of the series. Overall, the findings highlight that financial inclusion’s effects are contingent on development levels and nonlinear, implying that policy interventions must be institution-specific, quantile-sensitive, and tailored to the distinct economic contexts of SADC countries.